Bitcoin has always been the largest and most widely recognized asset in the crypto market, but in DeFi, the capital efficiency of native BTC is actually not very high. If you wanted to lend out stablecoins in the past, you usually had to wrap it, go cross-chain, or hand over your assets to centralized institutions. Each additional layer introduces extra custody, bridging, and contract risks. Babylon Trustless Bitcoin Vaults (TBV) aims to solve this problem: allowing users to directly use native BTC as collateral—no Wrapped BTC, no cross-chain bridges, and no reliance on centralized custodians. Currently, TBV has launched a public testnet for native BTC collateralized lending in collaboration with Aave v4. After users collateralize native BTC, they can borrow assets like USDC and USDT on Ethereum. I think there are four key points worth paying attention to here: 1. Native BTC can directly serve as on-chain collateral; 2. Users retain self-custody; 3. Access to market-driven DeFi lending rates; 4. BTC liquidity starts entering larger financial scenarios like lending, stablecoins, and derivatives. If this architecture proves successful, BTC’s role could evolve from a simple held asset to a foundational layer for on-chain credit and liquidity. The public testnet is now live, so you can try out the process and submit product feedback: Testnet: https://btc-vaults.testnet.(babylonlabs.io)/ Feedback form: https://forms.gle/AumNRHBzmbd9jcqL9 @BabylonLab_io BABY baby